On Tuesday, cryptocurrency prices dipped as investors are awaiting a crucial inflation update that might address the future of interest rates. Recently, Bitcoin’s price has encountered increased selling pressure, with significant holders influencing the price to maintain around $69,000. Yet, with the uptick in purchasing activity at these lower price levels, Bitcoin is set for a strong recovery if the upcoming CPI report proves favorable.
Bulls struggled to regain control as sellers strongly defended a push beyond $72K. According to order book data, large investors are aiming to lower the price further to secure new long positions. The current focus of investors is on the upcoming release of the United States Consumer Price Index (CPI) scheduled for April 10.
Meanwhile, the pressure persisted with spot Bitcoin exchange-traded funds (ETFs). On April 9, there was a notable withdrawal of $300 million from the Grayscale Bitcoin Trust (GBTC). This development took market watchers by surprise, and early data for April 10 indicated an even faster pace of GBTC withdrawals.
According to figures from the crypto intelligence firm Arkham, Grayscale transferred 4141 BTC ($292 million) to its Coinbase prime deposit addresses. The increasing selling pressure from Grayscale might further plunge BTC price.
However, on-chain data flashes bullish signs as the reserves held by exchanges have been on a decline since reaching a high of 2.85 million BTC in July 2021. This decline in reserves occurs as Bitcoin investors opt to remove their holdings from the custody of these platforms, signaling their intention to hold onto Bitcoin for the long term rather than engaging in frequent selling.
Investors believe that the Federal Reserve will follow through on its forecast of three interest rate cuts this year, amid ongoing signs of cooldown in the US economy. This has increased the anticipation for March’s CPI data, as any indication of inflation cooling down would be seen as a green light for a policy adjustment in June and might boost crypto prices.
After the Bitcoin price failed to hold its momentum above the symmetrical triangle pattern, bears took the charge to send the price below immediate Fib channels. As a result, Bitcoin dropped toward $68K; however, bulls strongly defended further decline.
The BTC/USDT trading pair is set to challenge its historical peak near $74K. This level might serve as a crucial resistance point; however, should the bulls break it, the pair is expected to trigger next bullish momentum, aiming for a target of $80K.
The window of opportunity for the bears is closing fast. To trigger a comeback, they need to quickly drive the price below the triangle pattern. If this happens, the trading pair could decline toward $64.3K.
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